Earnings Season Just Started. The War Hasn't Ended. Now What?

The S&P 500 recovered every point it lost since the Iran war began on February 28. On Sunday, it closed at 6,886 — just 1.3% below its all-time high. The Dow gained 302 points. The Nasdaq surged 1.23%. BlackRock, the world's largest asset manager, upgraded U.S. equities from neutral to overweight, declaring the war's macroeconomic impact "limited." And yet, while Wall Street was cheering, the President of the United States was simultaneously threatening to blockade Iranian ports through the Strait of Hormuz.

This is the contradiction that defines the market right now. The data says buy. The geopolitics say wait. And most retail investors are stuck in the middle, unsure which signal to trust.








The optimism isn't baseless. FactSet projects S&P 500 first-quarter earnings will grow 12.6% year-over-year — the sixth consecutive quarter of double-digit growth. If the usual pattern of upside surprises holds, that figure could stretch to 19%. Technology leads the charge with an estimated 45% earnings increase this year, followed by Materials at 20.7% and Financials at 14.7%. Goldman Sachs reported Monday; JPMorgan Chase, Morgan Stanley, and other major banks follow on Tuesday and Wednesday, with consensus expecting JPM to post an EPS between $5.32 and $5.50 on roughly $48.3 billion in revenue.

Meanwhile, crypto has staged a quiet but meaningful recovery. Bitcoin touched $73,784 on Friday — its highest level since early March — before sliding to $70,741 on Sunday after Trump's blockade announcement wiped the weekend gains. Ethereum climbed to $2,280 mid-week, also a one-month high, and has since settled around $2,196. These aren't moonshot numbers, but they represent a market that has shifted from capitulation to cautious positioning. The key driver was the Islamabad cease-fire: Bitcoin surged over 7% in a single week as the truce took hold, and both BTC and ETH have been trading in tight ranges since, waiting for the next geopolitical headline.








And the headlines keep coming. WTI crude surged to $104.32 intraday on Sunday after Trump announced the naval blockade, settling at $98.01 — still up 1.49% on the day. That is a 63% increase from January's $60 level. The cease-fire expires on April 21. A second round of Islamabad talks is being discussed, with both Turkey and Egypt joining mediation efforts, but neither side has committed to a date. Iran says U.S. demands are excessive. The U.S. says Iran won't abandon its nuclear ambitions. The diplomatic gap is wide, and every day it remains open, the war premium in oil stays elevated.

This creates a specific and measurable problem. Oil at $98-$104 feeds directly into consumer prices, airline jet fuel costs, and manufacturing input expenses. Airline stocks — which surged 9-12% on the April 8 cease-fire — have already begun giving back those gains as oil refuses to stay below $100. The Fed, which has held rates steady at 3.50-3.75%, now faces a market pricing in a 52% probability of at least one rate hike by year-end, according to CNBC's Fed Survey. Fitch's chief economist suggested two cuts are still possible — but only if the oil shock is "short-lived." Short-lived is not what we're seeing.

Here is what the data actually tells us. Earnings are strong, and that is not a mirage. AI-driven tech spending, defense and energy capex, and resilient consumer demand have kept corporate profits growing even through six weeks of elevated oil. BlackRock is right that the war's direct economic damage has been limited so far. But "so far" is doing a lot of heavy lifting in that sentence. If the cease-fire lapses on April 21 with no renewed agreement, oil could retest $110-$115. If it does, the inflation narrative shifts from "transitory war shock" to "structural price pressure," and the Fed's window for cuts closes entirely.









For the retail investor — especially the small-capital investor — this means one thing above all: do not leverage. Do not take loans to buy this dip. The S&P 500 is 1.3% from its all-time high, which makes it tempting. Bitcoin near $71,000 after hitting $73,700 makes it tempting. But the variance in outcomes over the next seven days is enormous. A deal in Islamabad could send oil to $85 and Bitcoin past $75,000. A collapse could send oil past $110 and Bitcoin below $68,000. The DXY at 98.36 and gold at $4,729 both reflect a market hedging both directions simultaneously.

The smart move is not to predict which scenario wins. It is to size your positions so that you survive either one. If you have a conviction in long-term earnings growth — and the data supports that conviction — then dollar-cost average into quality names at modest weekly amounts. If you hold crypto, keep position sizes small enough that a 10% drawdown does not force you to sell. And if you are sitting in cash, understand that cash at 3.5% in a money-market fund is not a failure — it is a strategy that preserves your ability to act when clarity arrives.

Earnings season will provide one kind of answer this week. Islamabad will provide another. The investors who thrive in this environment are not the ones who guess correctly. They are the ones who stay solvent long enough to benefit from both.




* Visuals created with AI for illustrative purposes. Disclaimer: The information provided in this post is for educational purposes only and does not constitute financial advice. Always do your own research before making any investment decisions.

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